How communities can spur economic development in post-pandemic era

Attracting local economic development in a post-pandemic era requires a variety of tactics, experts say.

Among them is performing a thorough assessment of resources, securing visits from site selectors, and encouraging businesses to take advantage of incentives available at the local, county and state level, they advise.

Develop relationships

First on the list for any municipality is to compile detailed information on the local infrastructure, along with a precise, up-to-date inventory of land and real estate available, said Patrick Hoban, director of the Basic Economic Development Course offered in Naperville through Southern Illinois University at Edwardsville.

All that information is presented to site selectors, the expert consultants that act as the go-between for businesses searching for a site and local communities, said Hoban, whose course is accredited by the International Economic Development Council.

Attending site selector conferences is a great way to make connections and market one’s town, Hoban said.

“We tell our story with the goal of bringing the site selectors back to our community for a familiarization tour, where we drive them around and show them the product — which is our people and our community,” Hoban said.

Local communities can band together to finance site selectors’ visits, an approach used by Bloomington, Peoria, Champaign, Decatur and Springfield, said Hoban, who is CEO of the Bloomington-Normal Economic Development Council.

“I don’t think that we are competing (to be selected by businesses) with each other, or even with Chicago, as much as we are competing against other states,” he said.

Michael Cassa, chairman of the Illinois Economic Development Association, said it’s imperative for local municipalities to develop relationships with commercial and real estate brokers with specialized client portfolios.

“If you are a suburb that has a lot of office buildings, you want to reach out to real estate brokers that handle office projects,” he said. “That relationship with the brokerage community is so critical.”

Local communities also should develop relationships with developers who have close connections with specific restaurants and retailers, said Cassa, who works as economic development director in Sugar Grove. Thanks to such a relationship, the town’s first Starbucks is expected to open in early 2025, Cassa said.

“Restaurants and retailers are still a very, very important part of any economy, because they help pay for local services like police and snow removal,” he said.

A variety of incentives

While most local projects don’t require incentives, any suburb should consider what it potentially can offer, such as sales tax rebates or property tax abatements, Cassa said.

Arlington Heights offers an interest-free loan program for new and existing businesses that invest in concrete improvements, such as interior buildouts or equipment purchases, said Michael Mertes, business development manager in Arlington Heights. In the wake of the pandemic, the village increased the loan’s duration from one to 1½ years, he said.

Incentive programs offered by the county also can play a crucial role, Mertes said.

The new owners of the former AT&T call center in downtown Arlington Heights used Cook County’s property tax abatement program to rehab the building and accommodate new tenants such as professional and medical offices, he said.

“They just finished achieving 100% occupancy,” he said.

Towns should market any local resources that can be attractive to startups and small businesses, Mertes said.

For example, the Arlington Heights Memorial Library’s makerspace offers an opportunity for small businesses who might want to embroider their logos on shirts, or create prototypes with 3D printers and laser-cutting technology, he said.

Coworking spaces can be attractive to startups that don’t need much space but can benefit from an “incubator” environment, Mertes said.

“Tenant spaces that have been vacant for a long time can be potential sites for that,” he said. “More than ever it’s important to be creative in what you offer.”

Municipalities also should carefully track data regarding their business diversity — in terms of both type and ownership — to try to attract underrepresented businesses, Mertes said.

“Numerous studies have shown the value of that,” he said. “Whether it’s diversity in terms of race, veterans, LGBTQ+, it helps us bridge a gap and be a more thriving place, a place where people — not just business owners, but visitors and residents — also feel more welcome and represented. It’s a tremendous asset in any community.”

Expanded state programs

Illinois has done a good job adapting to current business needs by introducing and expanding a variety of business incentive programs, Hoban said.

“We have more tools now, when it comes to incentives to attract or retain businesses, than we have ever had in my career,” he said.

For example, in early 2023, the state created the “Invest in Illinois” discretionary fund for high-priority projects, and expanded incentive programs such as Reimagining Energy and Vehicles (REV) and Economic Development for a Growing Economy (EDGE), whose investments tripled to nearly $3 billion since 2022, according to Gov. J.B. Pritzker’s office.

EDGE investments include UPSIDE Foods opening its first commercial-scale meat cultivation plant in Glenview, and Flender Corporation expanding its manufacturing facility in Elgin. MicroLink Devices used REV incentives for its facility expansion in Niles, the governor’s office said.

To maximize results, it’s important to keep an eye on what other states are doing, Hoban said.

For example, the REV program was underutilized until — based on the example of Indiana and Michigan — the state expanded its scope and duration, he said.

Another state incentive program, the Data Center Tax Credit, attracted more than $1.8 billion in investments last year, including Prime Data Centers in Elk Grove Village, up from $500 million in 2022, the governor’s office said.

Most towns would like to attract data centers, which generate a lot of property taxes, but the key is the availability of adequate electric power infrastructure, Cassa said. “Data centers require a tremendous amount of electricity,” he said.

Sugar Grove’s long-range comprehensive plan includes the possibility of annexing about 760 acres of farmland that straddles Interstate 88, east of Route 47, currently owned by Crown Community Development. The area includes about 250 acres north of I-88 that would be especially well-suited for a data center because of the proximity to a ComEd substation, Cassa said.

However, the plan hinges on the property owner being willing to annex and extending water and sewer services to the area, he said.

Recently an advisory board cast a tie vote on a potential plan to create a tax increment financing district for the Crown Community Development property. The final decision on whether to create a TIF district rests with the village.

Hoban added, rather than aiming to attract large manufacturers, municipalities should work with their local businesses to find out who their suppliers are, and then work on trying to bring them to the area.

Local workforce

Despite increased business investment in Illinois, the state’s unemployment rate ticked up to 4.8% in April, up from 4.7% in December, remaining among the worst across the country, according to the U.S. Bureau of Labor Statistics. The national unemployment rate was 3.9% in April.

It’s crucial to perform a local workforce analysis to determine what types of workers communities can offer to businesses, Hoban said.

In the Chicago area, a labor shed analysis — of the types of workers who commute to work — can be especially useful, he said.

“Who are the workers who either drive or take the Metra to Chicago every day? You might find, for example, that you have 100 engineers that do that, so why not go after an engineering firm and bring that to the suburbs?”

Local municipalities commonly work in tandem with educational institutions to make sure the workforce meets the demands of the job market, whether that be a six-month certificate for a manufacturing job or years of schooling to become a physician, Hoban said.

Student internships are a great tool to lay the groundwork for workforce development, he added.

To that end, the Will County Center for Economic Development this year launched its first paid summer internship program in partnership with local businesses and schools.

More than 20 employers, including nonprofits, manufactures and health care companies, hired 36 high schoolers for summer internships in IT, human resources, social media and more, said WCCED Director of Investor Relations Kayla Sorensen, who coordinates the internship program.

“The goal is to showcase to students the opportunities here in the area and encourage them to stay in the area post-graduation,” Sorensen said. “Employers are really wanting to take on these high school students to have the extra help and showcase their industries, but they don’t have the capacity of building connections with the schools, or doing the marketing. We are coming in as the middleman.”

WCCED already is working on expanding the program countywide next summer, Sorensen said.

Be realistic

Business retention also is a key aspect of economic development, so local municipalities should keep open communication channels with their businesses and look into what’s not working for them, Hoban said.

“Once you collect enough data on why they are not growing, you have something you can advocate for and change,” he said.

Nowadays, a common problem for businesses is lack of housing stock, Hoban said. Developers, in turn, say they need access to capital, which is where incentive programs can be crucial, he added.

“If you don’t have the infrastructure or the workforce to support the company, don’t go after them,” he said. “They won’t make it.”